A price-discriminating firm will always maximize profit by following the condition that
a. MR > MC.
b. MR > P.
c. MRa = MRb = MC.
d. MR = ATC.
c
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According to the law of one price
A) a company can only charge one price for a product, no matter which nation the product is sold in. B) interest rates across nations should be the same when adjusted for exchange rates. C) goods that are easily tradable across nations should sell for the same price expressed in a common currency. D) the price of gold should differ between nations.
A relative price is
A) the number of dollars that must be given up in exchange for the good. B) also called the money price. C) not an opportunity cost. D) the ratio of one price to another price.
Which of the following is a necessary condition for successful price discrimination?
A) The seller must possess market power. B) Transactions costs must be zero. C) The buyer must possess market power. D) Buyers must have identical inelastic demands.
When the cross-price elasticity of demand between two products is positive, the two goods are said to be substitutes
a. True b. False